Consumer Choice Welfare and Behavioural Aspects Practice Questions | A-Level Economics

Consumer Choice Welfare and Behavioural Aspects

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A consumer buys only two goods, X and Y, and spends the entire income. At the current bundle, \(\frac{MU_X}{P_X} \lt \frac{MU_Y}{P_Y}\). Which adjustment is most consistent with utility maximisation in marginal utility theory?

Select one option.

Buy more X and less Y until \(MU_X = MU_Y\)
Buy less X and less Y until marginal utilities are both zero
Buy more X and more Y until total utility is maximised
Buy less X and more Y until \(\frac{MU_X}{P_X} = \frac{MU_Y}{P_Y}\)
Do nothing because full income expenditure implies equilibrium

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